The Biden administration inherited an economy with millions out of work, a rapidly climbing inflation rate owing to supply chain disruptions, and a failed pandemic response. Its combination of aggressive fiscal policy and targeted public investments has led to a strong economic recovery that is the envy of advanced economies. The CAP plan builds on these successes with new public investments — especially in people — that will reduce families’ cost of living while promoting future productivity growth.
Largely as a result of two decades of unpaid tax cuts, America’s fiscal trajectory has moved from a projection of an ever-declining debt-to-GDP ratio to one rising indefinitely. The CAP plan places America on the appropriate fiscal trajectory: slowing down the growth rate of the debt-to-GDP ratio so it peaks below 120 percent of GDP and begins falling modestly as the federal government begins running a primary budget surplus toward the end of the 30-year budget window. More important than the specific level is that the debt-to-GDP ratio stops growing indefinitely and begins to fall.
The CAP plan does this while safeguarding our commitments to seniors, investing in the American people, putting our debt trajectory on course toward stabilization, and preventing interest costs from crowding out private and public investments that will help us move toward a greener, more resilient economy. In particular, policymakers must use the expiration of many of former President Trump’s tax cuts at the end of 2025 to raise revenue by raising taxes on the wealthy and corporations.